Invasion of the $10 Wardrobe

It takes a lot of people to make an 89,000-square-foot space feel cramped, but the October opening of Uniqlo's largest store in the world, a three-story extravaganza located on a prime strip of Fifth Avenue in Manhattan, was wall-to-wall. "It feels like all of New York is here," a man in a leopard fez and false eyelashes said to his companion, as they attempted to shove their way through a mass of people without spilling their saketinis. It was true: Among the throngs getting lost in the maze of sweaters were the kind of New Yorkers who lent the event that feeling of place-to-be-ness. On the mezzanine, legendary Times photographer Bill Cunningham poked at a rainbow of cashmere scarves; just up the stairs, James Murphy, late of LCD Soundsystem, navigated a forest of mannequin legs in skinny jeans, while Mickey Drexler, the CEO of J.Crew, held court beside some thermal underwear. But the biggest boldfaced name, the reason everyone had come, was making his way to the stage. "Was that..." one bystander murmured, after the sea of people parted to allow Tadashi Yanai, the billionaire founder of Uniqlo and one of the richest men in Japan, to pass by. "Was that Susan Sarandon?"

Indeed it was Sarandon, whose face was one of many New Yorkers on the ads with which Uniqlo had effectively blitzed the city. The actress, who gamely donned a Japanese happi jacket and cracked open a sake barrel with a wooden mallet, drew by far the most attention that night. If Yanai was upset about not being the star of his own party, he didn't show it. "This is the happiest day of my life," the 62-year-old told the crowd. He didn't care if anyone noticed him so long as they noticed the store. Which, how could they not? It was as if a giant glass spaceship had landed smack in the middle of Manhattan and announced its sovereignty. In case this wasn't bold enough, the following week Uniqlo opened a second store not far away, in Herald Square. The arrival of not one but two of these behemoths filled with affordable casualwear wasn't actually a weird mistake made by crazy Japanese people with their big foldout maps but the beginning of a calculated takeover.

Yanai's company, Fast Retailing, has 845 Uniqlo stores in Japan and more than 190 worldwide, and over the next two years it plans to open some 200 more. In a gesture indicative of the grandness of its plans, it has introduced a blunt new tagline, made for all, about which Yanai is dead serious. He wants all of us to dress in Uniqlo, just as everyone everywhere drinks Coke or eats McDonald's. Yanai's goal, which he repeats often and with great conviction, is to make Uniqlo "the number one retailer in the world." While it has a long way before it beats, say, Walmart, Fast Retailing, which raked in $11 billion in sales last year, is creeping up on its rivals (both Zara's parent company, Inditex, and H&M earned $17 billion), and it's already number one in Japan, where Tadashi Yanai is practically a household name.

Though even there, he sometimes blends in. "No, no, people don't notice me," Yanai told me this summer. A generous five feet five, with a slight underbite, upturned nose, and teacup ears, he looks a little like Yoda in a suit. We were sitting in his thirty-first-floor office, which is scrupulously plain but for a wall-length window from which he can see all of Tokyo and, beyond that, the world. "Even the employees don't notice me," he continued, and although he was speaking through a translator, he was obviously amused. On quality-control visits he's able to dart in and out of stores unseen, a ninja in pinstripes. "I kind of sneak in," he grins. "I turn around, and I quickly go out of the store." Two years ago, he walked into a Tokyo Uniqlo to buy himself some socks. Later that evening, he noticed the cashier had neglected to give him the employee discount. She hadn't recognized her own boss.

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It's fitting that the founder of Uniqlo would pride himself on anonymity, since the whole point of Uniqlo is to produce clothing that's anonymous. The company's name is a foreshortened version of the one Yanai gave it in 1984, Unique Clothing Warehouse, although since then the garments have evolved to the point where it could be said they are not unique-looking at all. The company specializes in fetishistically pared-down basics—jackets, jeans, sweaters, socks, functional pieces that are intended to blend seamlessly into a wardrobe—which it stocks in huge quantities in massive ultramodern stores. The flagship in SoHo, a vast white space with brightly colored cashmere sweaters lining the walls like stacks of Crayola crayons, makes Gap look like a Soviet-era department store.

Going to Uniqlo feels a little less like shopping for clothes than visiting Ikea, but that's kind of the point. "We think it is not fashion," Yanai says. "It is clothes. It is parts. Therefore, you combine the parts differently to create your own unique expression."

(Yanai's manner of speaking—"half concrete, half abstract," as Uniqlo's creative director, Kashiwa Sato, describes it—combined with the way Japanese translates into English, has the effect of making him sound a little like Yoda, too.)

Unlike its "fast-fashion" competitors, which produce trendy products in limited quantities each season, Uniqlo barely pays attention to trends, preferring to spend time perfecting its stable of basics. Employees talk a lot about paring things down to the "essence," a term that seems to have an almost mystical meaning to them. From a design standpoint, it's about stripping away all ornament so that the items of clothing are the most simple and true versions of themselves. Hence, its jeans are "profound" in their representation of jeanness. Its shirts are the essence of shirtiness. Occasionally designers will try to expand on a garment, to add grommets or a ruffle, and Yanai will remind them to concentrate on the essence. Extras are embraced only to make a piece more functional: They'll add a bit of reinforcement here, more stitching there, a lining made out of the company's insulating "Heattech" material.

Massive production orders help keep prices at Ikea levels, too. In the United States, cashmere sweaters fall as low as $49. Down jackets are $80. A few years ago, Uniqlo produced a pair of jeans they could sell for 9.90 in every country—9.90 pounds, 9.90 euros, 9.90 dollars, 990 yen—to underscore the message they wished to convey to the world: "People shouldn't have to spend a lot of money to get high-quality clothing," says Yanai.

Not even the ones who can afford it. Which is why, when Yanai discovered he'd been deprived of his discount, he picked up the phone and called his own customer-service line. "I said, 'I'm an employee of this company,' " the billionaire recalled, beaming, "and I got my money back."

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Saving money is on everyone's mind these days, but a prolonged economic slump is nothing new in Japan, where the effects of the '90s market crash have lingered so long they're now chronic conditions. While long recessions produce mostly losers, they also produce some winners, and it has been this sorry period in Japanese history that has enabled Uniqlo to achieve its current status. The company made its first billion in the late '90s, when it developed a low-cost version of the popular but expensive fleece jackets being made by Patagonia and The North Face. As the years moved sluggishly on, Uniqlo fine-tuned the process of catering to economically challenged consumers. Now that market is the entire world, which is part of the reason the urgency at the company is palpable.

CHANGE OR DIE shrieks a sign on the wall near the reception area of Fast Retailing's offices, which occupy seven floors of a tall glass tower in Roppongi, Tokyo's business district. This is the motivational slogan Yanai has chosen for the year 2011. Alongside it are slogans from previous years (2008 was a sober NO CHALLENGE NO FUTURE; 2007 was simply MAKE PROFIT). The young Uniqlo-clad employees pounding at their laptops look sufficiently motivated. Should they lose focus, every few feet a framed copy of the Fast Retailing mission statement, which is written in an inspirational cadence that recalls the Serenity Prayer—"To create truly great clothing with new and unique value, and to enable people all over the world to experience the joy, happiness and satisfaction of wearing such great clothes"—reminds them of their purpose.

All corporations have their party lines, but Uniqlo employees toe theirs with an intensity that suggests they truly believe in it. Uniqlo, for them, is about much more than clothes—if it's even about clothes at all. "We think we are not in the apparel industry," Hiroshi Nagai, a spiky-haired communications ecutive, tells me one afternoon this summer, fidgeting in his chair in one of Uniqlo's many conference rooms. Nagai has been so busy with the expansion, he's drinking a Diet Coke instead of eating lunch, and his eyes have a wild gleam of sleep deprivation. "We are not in the retail industry," he goes on. "It's a mission, a vision, and a dream."

Working at a place like Uniqlo could easily be one of the most boring jobs in fashion—why spend years perfecting a shirt when Issey Miyake needs pleating down the street?—but Yanai has managed to sell his employees on the idea that serving the masses is more noble than serving the "fashion gods." "Oh, I have something for you," Nagai says, reaching into his messenger bag. He pulls out a piece of paper, on which is written the following koan:

Uniqlo is the elements of style.

Uniqlo is a toolbox for living.

Uniqlo is clothes that suit your values.

Uniqlo is how the future dresses.

Uniqlo is beauty in hyperpracticality.

Uniqlo is clothing in the absolute.

"That comes from Yanai-san's thoughts," he says of the words, which several months later would be pasted on the nose of every bus in New York City. "This is his vision."

In Japan decisions are usually made by a process called nemawashi, where an ecutive goes around soliciting opinions from everyone before making a judgment. This is not the case at Fast Retailing, where all decisions are made by Yanai, and his employees treat him with Dear Leader-like reverence. "People are attracted because of his brilliance, his leadership, his vision," says a former investor-relations manager who did not wish to be named. "All of which are elements of a successful dictatorship."

Yanai holds frequent staff meetings at which, in addition to preaching company values, he is famous for asserting extraordinarily high-reaching goals: Last year, for instance, he announced that Uniqlo should be worth 5 trillion yen, or about $65 billion, by 2020, and decreed that all company meetings would be conducted in English by 2012. These goals, Yanai admits, are aspirational (even he isn't fluent enough to conduct a meeting in English). But "I don't think it's too aggressive a dream," he adds with a smile. "If you are an athlete, you will never dream to win the bronze medal."

Earlier this year, a Japanese journalist wrote a book, The Glory and Disgrace of Uniqlo, that accused Yanai of pushing workers in the stores and overseas factories too hard. The company has since sued for defamation, and there are some, at least at headquarters, who find Yanai's demands exhilarating. "This may not be a good way of saying it," says Daisuke Hase, Uniqlo's whippet-thin Tokyo-based spokesman, "but it's like having a drug. To achieve, to accomplish."

Even the ones who don't take the goals seriously at first can find themselves caught up. "It's the weirdest thing; it's almost like religion," says the former investor-relations manager. "After you hear it again and again, you start to think: Maybe. "

On a Tuesday afternoon in August, a three-man advertising team waits in a conference room for the CEO to approve ads that will go in this week's newspapers. The company runs ads every week, and Yanai approves every single one of them. As they wait, they begin to visibly sweat.

At precisely one o'clock, Yanai pokes into the room, greets them briefly, and slides his eyes onto the table. A moment goes by, then he grunts.

"" Yanai says. ("He is not happy," the public-relations guy whispers in translation.)

"" ("He says, 'This is not what our customer wants. She is thinking about fall now.' ")

"" ("He says it is not cool enough.")

" !" Yanai waves his hand and walks out of the room.No one translates that.

Yanai himself grew up in something of a dictatorship. He was born following World War II, when Japanese culture was still heavily influenced by Confucian ideas about filial piety. "There was this saying," he explains. " 'These are the things one is really afraid of: earthquake, thunder, fire, and father.' See, a father was such a figure. Just like an earthquake, he would make people shake and tremble." So it followed that Yanai, who studied political science in college, had no choice when his father asked him to take over his menswear shop in their small suburb in Yamaguchi Prefecture, in the south of Japan.

But Yanai didn't want just a store; he wanted an empire. Like many of the dankai no sedai, the baby boomers who came of age during this time of expansion in Japan, he revered the work of Peter Drucker, the American management guru who advocated the idea that amassing piles of money and morality need not be mutually exclusive. It was from Drucker that Yanai learned "to first think what customers want," as he later put it, "rather than what a company wants to sell." He added women's clothing to his store's stock, rebranded, and began expanding around the suburbs.

Drucker was the first of many heroes. In the late '80s, when Gap was in its heyday, Yanai invited the company's wunderkind president Mickey Drexler to breakfast. Drexler arrived to find a little man peering up at him from a large round table.

"You are my professor," Yanai told him. "I follow everything you do."

There's a picture of the meeting on the wall in Yanai's office. Drexler looks faintly bemused. Yanai is grinning like a teenage girl. Not long after, Uniqlo adopted Gap's business model of producing and selling exclusively its own clothing and began making its own Gap-like commercials with celebrities and dancers in khakis. "He followed everything Gap did in those days," Drexler says good-naturedly. "He had no ego about it."

Like any good knockoff artist, Yanai also did it on the cheap. In 1993 he moved production to China, a nearly unprecedented move at the time, and was criticized for helping spur deflation in a down economy. "Consumers who previously spent 10,000 yen for clothes pay only 2,000 to 3,000 yen if they buy Uniqlo," was his retort to a business magazine. "Doesn't that make them better off?"

In 2002 he made his first push toward global expansion, opening twenty-one stores around London and, a few years later, three in malls in New Jersey. The plan was ill-conceived: Trying to hawk a cheap fleece in London, where there's a Marks & Spencer on every corner, was like trying to sell, well, rice in Tokyo. The stores fell similarly flat in New Jersey, where Uniqlo's plain clothes, presented with little fanfare and awkwardly resized for larger Western bodies, had trouble competing with those displayed on the tanned brand representatives at Abercrombie down the hall. Within a year and a half, Uniqlo closed sixteen of its London locations; the three in New Jersey soon followed.

He'd lost millions, but in one way the expansion was a success: Uniqlo had learned that it couldn't succeed as it had in Japan just by being ubiquitous. First, it had to be cool. Yanai cold-called Kashiwa Sato, a celebrity designer in Japan, and asked him to head a creative team that would help Uniqlo make a splash with flagships in cities across the globe, beginning with New York. "I told him, 'Your brand is totally uncool,' " Sato recalled this summer. " 'If you want to go to the world, you need to redo everything.' " The company ditched the bigger, Gap-ier sizing, deciding instead to emphasize the careful Japanese tailoring of its designs. Sato and his team brought in young, hip lines like Vena Cava and Charlotte Ronson, and Yanai's wife suggested he approach Jil Sander with enough money to lure her out of retirement.

Since its opening in 2006, the SoHo store has become one of the highest-grossing Uniqlos worldwide. When the company's collaboration with Jil Sander, +J, launched in 2009, thousands of people snaked around the block, even though Uniqlo, being Uniqlo, had stocked enough that it was in no danger of running out. Meanwhile, during the downturn, Yanai snapped up the higher-end-basics companies Theory and Helmut Lang. At one point, he suggested that buying Gap was "within the scope" of possibility—an acquisition that would make his conglomerate of "parts" whole.

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"You're amazing," Mickey Drexler gushed at Yanai, gesturing around the new Fifth Avenue store. In the months before the opening, Uniqlo had transformed empty storefronts around the city into pop-up shops, like the ghosts of retail-outlets future. Not everything had gone smoothly. The collaboration with Jil Sander ended abruptly in June. "Jil Sander, she has her own ego," Yanai said of the partnership. "Where us, we just want to see the fusion between the two talents." Some things got lost in translation: The New York office found itself having to explain to the Tokyo office that Chito Moist innerwear for women would not go over well in the States. "We were like, 'Um, noooo,' " said a U.S. public-relations rep. "You can't sell underwear with 'moist' written on it." A fire alarm went off at the Fifth Avenue party, and the thousand or so people inside nervously swigged sake until the fire department showed up.

By the time of the grand opening the following day, the kinks had been ironed out. The sky was gray and drizzly, but the faces of the Fast Retailing ecutives reflected in the store's glassy facade were bright. You'd never have known the country was still recovering from a recession by the hundreds of people straining at the barricades that stretched down 53rd Street. Mayor Bloomberg thanked Yanai for bringing more than 1,000 jobs to the city. In the audience, Yanai's wife, wearing +J, listened as her husband pronounced the store "the realization of my American dream." This, she knew, was only the beginning. "My husband is very successful," she told me. "But that doesn't mean he's going to stop working." A cheer arose from the crowd. Flashbulbs popped. "Thank God," one woman said to her daughter, as they grabbed complimentary tote bags from the black-clad employees handing them out. As the mass surged into the store, Yanai slipped unnoticed into a waiting Town Car and drove away.

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